The self-employed are at risk of underpaying their tax because of a technical glitch in the Government’s systems, warns TaxAssist Accountants.
Taxpayers who have already filed their 2017/18 tax returns are receiving bills from HM Revenue & Customs (HMRC) that do not include their ‘payment on account’ – an instalment for next year’s tax. There have also been instances of no tax liability being shown, when in fact Capital Gains Tax is due.
Not all taxpayers are required to make payments on account, it will depending on the level of their tax liability and how much tax they have collected “at source” (from their wages or pension income, for example).
Jo Nockels, the Senior Training & Communications Manager from the TaxAssist Accountants, said: “If you’re using a tax adviser or accountant, make sure that the amount due on any HMRC correspondence or when you log-in to your tax account, is the same as what your adviser told you it would be. If there is any discrepancy, make sure you call your accountant or tax adviser; do not rely on the information being sent by HMRC.”
“If you don’t use an accountant or tax adviser, check your 2017/18 return. If you find there is an error, make sure you contact HMRC to put it right,” said Jo.
If you are affected by the issue, you must take action because you are at risk of HMRC accidentally reimbursing the 'overpayment' or being charged late payment penalties if you pay too little.
In the Agent’s Forum, a HMRC Issue Resolution Manager advised: “We are aware of an issue with Payment on Accounts for a small number [of] customers for returns from tax year 2017-18. Anyone who is affected should contact us and we’ll put it right. Nobody will be charged additional interest due to this problem.”